Sachsen LB Europe plans to use credit derivatives for the first time for investment and hedging by year-end if it receives approval from its parent Landesbank Sachsen Girozentrale. Adrian Fitzgibbon, managing director of Sachsen LB Europe in Dublin, said it is discussing the risk management, systems and legal framework needed to use credit derivatives with its parent at the moment. He declined all further comment. Officials at Landesbank Sachsen Girozentrale also declined comment.
One credit derivatives trader welcomed the prospect of another Landesbank joining the market. However, he noted that the significance of the move will depend on the firm's strategy. Rivals Westdeutsche Landesbank Girozentrale and Bayerische Landesbank are both major uses of credit derivatives, while other landesbanks have only stuck a toe in the water.
The subsidiary had assets of approximately EUR844 billion (USD736 billion) on Dec. 31, 2000.